Dilhan Pillay, Executive Director & CEO, Temasek International spoke at the World Cities Summit 2021 on 22 June.
Good afternoon ladies and gentlemen.
It is indeed a privilege for me to be here, to join you at the World Cities Summit conference.
Climate Change
Climate change is an existential challenge for the world that is affecting many countries and cities.
If not addressed, it can lead to dire consequences that will threaten the wellbeing of communities.
Technological Advancement
Technology has improved leaps and bounds over the past decade.
It has played a crucial role in improving the quality of lives for the population and helped boost the economy for many countries.
Technology is expected to continue advancing quickly in the foreseeable future and cities will need to navigate through the complexities and disruptions that will come along with technological advancement.
Role of Corporates
As the world modernises, the role of corporates becomes more critical in driving large scale agenda, and expectations move well beyond the primary function of companies.
Defining the purpose of a corporation will be essential to giving it a license to operate and how it expects to be measured by multiple stakeholders.
It includes essential role corporations can play in improving cities, especially in vital times of crisis and disruption, where expectations move beyond simply delivering a financial return.
Corporations must work together with communities, employees, customers, suppliers, investors and the heart of it, to always consider the environment when making decisions.
Impact of COVID-19
We should also consider the impact of COVID-19.
COVID-19 is the biggest disruption we have faced globally since World War II.
Quite apart from the impact it has had on lives and livelihoods, as well as communities around the world, we have seen the acceleration of the pace of innovation and of change.
We can’t just bounce back to a pre-COVID world. We have to move forward, to a world where our capabilities and efforts will be used to catalyse solutions to big global challenges: be it climate change; food security; water conservation, among others.
We have to move to a post-COVID-19 world that is more sustainable and where we use the massive advances in science and technology to improve the ways cities work and people live.
In this slide, I would like to talk about four trends of the future.
The United Nations estimates that the world’s population residing in urban areas will grow from 4.2 billion in 2018 to 6.7 billion by 2050.
Cities today already face unprecedented challenges and pressing concerns ranging from resource scarcity, climate change, ageing infrastructure to security risks.
From this slide, we show the four broad emerging trends of the future that will have pervasive impact on cities.
With increasing urbanisation, we will see how these structural trends come to life.
The first is Digitisation and Sustainable Living. These are cross sectoral trends that cut across many sectors.
The two other trends are Future of Consumption and Longer Lifespans. These reflect shifts in consumption patterns and growing healthcare needs caused by and attributable to longevity. Put simply, we’re living longer, but that means we have needs for a quality of life as we do so.
Let's look at climate change. We have had the hottest decade on record.
Sustainability is at the core of the future trends that I have spoken about, and that’s why it is at the core of all that we are doing at Temasek.
On top of taking care of our cities and its people, we need to ensure that the planet that we are living in is able to sustain us as we ride through the four trends of the future.
As you can see from this slide, we are currently living in the hottest decade on record1.
Despite a brief dip in carbon emissions due to the COVID-19 pandemic, most of the world is still heading for a temperature rise in excess of 3-degrees Celsius this century, which is beyond the 1.5-degrees Celsius Paris Agreement goal.
Rising urbanisation in big cities is leading to an increase in urban heat, where night temperature can be as high as 9-degrees Celsius higher in built-up areas compared to surrounding areas.
Rising sea levels is one of the areas which will cause the most severe impact of climate change.
Cities previously benefitting from maritime trade routes, from being situated in a coastal area, are now at risk of being impacted by rising sea levels caused by climate change.
Singapore is also suffering from global warming.
According to the Meteorological Service Singapore, Singapore is heating up twice as fast as the rest of the world, at 0.25-degrees Celsius per decade. Compared to the 1950s, Singapore is already 2-degree Celsius hotter today2.
This temperate increase is not sustainable as it will led to downstream impact on rising sea levels, shifts in biodiversity habitats, and heat waves3.
We have seen how the use of air conditioner contributes to this, and therefore we will need to adopt better designs for the built environment. The use of thermal comfort solutions and new building materials, for example.
Having said that, there are opportunities in the horizon for all of us.
We need to look into the following key areas that are opportunities for innovation in cities – water, energy, food, waste, urban development, materials, and clean transportation – all linked to the sustainability of our cities and communities.
Water
In the context of Water, it is both a necessity and a key resource for the world to cope with urbanisation.
Cities need to address the issues of water resilience, scarcity, pollution and toxicity through conservation, treatment and management, to ensure that its populations have consistent and reliable access to a clean water supply in a cost-effective way.
Energy
In the context of Energy, cities need to work towards more sustainable forms of energy to power up the various industries within and help to cope with the rising temperatures.
The per capita energy usage in cities is higher as compared to the suburban areas around.
Renewables such as geothermal, solar, hydro, wind, hydrogen and fusion, need to play an even greater role in the decades ahead in powering our cities.
Food
To combat climate change and help produce more sustainable food sources, we need to look across the entire Agri-food chain to see how we can produce more nutritious, fresher and environmentally friendly foods at an affordable price to feed the growing community.
The growth in demand for protein to feed the world’s growing population can’t be sustained using existing sources.
We will require more protein to develop more protein. Hence, the emergence of alternative protein.
The environmental impact of, for example, an alternative protein burger is vastly lower: 87% less water use, 96% less land use, 89% fewer GHG emissions, and 92% less dead-zone creating nutrient pollution.
Waste
Waste is also an issue in cities.
As a city’s population increases, consumption increases, and more waste is generated. This places pressure on the waste management infrastructure for cities and governments.
A robust waste management strategy can play a critical role in helping cities increase its liveability and to decarbonise.
Urban Development / Materials
In terms of urban development and materials, these are linked to the built environment and overall urban development of cities.
As urbanisation drives the demand for more infrastructure, the use of cement in the built environment is also set to rise.
Cement is the source of 8% of the world’s carbon emissions and the third largest global emitter of carbon.
Steel is also a crucial material for the built environment and engineering sector, but the industry is also amongst the biggest producers of carbon, responsible for 4-5% of the world’s emissions today4.
However, there are emerging solutions that can contribute to the decarbonisation of these hard-to-abate sectors.
There is an urgent need to revolutionise these sectors, especially when materials can be such an essential part in the building of cities in the future.
Clean Transportation
Clean transportation is the last part.
Population growth and continued urbanisation of cities will lead to an equally increasing demand for urban transportation. Demand for urban passenger transport is expected to grow by 60-70%, by 20505.
An important aspect of decarbonising a city will require looking at expediting the shift to sustainable transportation means, such as the introduction of autonomous vehicles and to encourage ride sharing, for the population to travel between various points.
The move to electric vehicles is also critical as an interim measure, as it does help to reduce pollution, and this could also contribute to better healthcare outcomes arising from the negation of pollution numbers.
We must also look to accelerate technological innovations that can help cities decarbonise in the short term.
It is challenging to decarbonise brownfield districts arising from fragmented ownership while ensuring business-as-usual.
For example, cooling is essential especially in hot and humid climates, but cooling consumes a lot of energy and contributes to global warming via the emission of hydrofluorocarbons that are potent GHG.
One solution that has gained traction is district cooling, but it is typically incorporated into the design of a new development. There is a need to see how this sort of solution can find its way into the existing environment in order to contribute to the target emissions commitments that we are prepared to make.
Synergies and system-level resilience can be harnessed by integrating various clean technology solutions together. Reduction in hardware costs and increased sophistication in artificial intelligence have enabled cities to be smarter and to drive more efficiency.
To promote a more sustainable future, a strong public-private sector partnership is required to ensure collective responsibility is fostered.
Cities cannot do it alone. Policy frameworks need to be implemented to help cities in their low-carbon transition.
Only 22% of global carbon emissions are subject to some form of carbon pricing currently6.
Carbon pricing can be potentially be an effective tool at reducing carbon emissions, and a fair and equitable way to raise finances for capital intensive climate adaptation projects.
Policies can be geared to mobilise private finance towards sustainable investments and away from pollutive industries, to ensure that the next stage of the cities’ growth do not lock them into carbon-intensive pathways.
Cities can also work with local and global financial institutions to develop climate finance solutions to help achieve these goals.
Cities, corporates, and communities need to co-operate and work with each other, and share best practices on solutions to build resilience, cope with disruptions and push the boundaries of the current city landscape to innovate for a better tomorrow.
The impact of COVID-19 has put strains on government support and government finances.
Providers of long term capital, such as Temasek, can do well to invest our capital in game-changing innovations and solutions.
There is a role for private capital in funding decarbonisation solutions and to help to contribute to the reduction of the climate abatement cost curve, especially in the hard-to-abate sectors such as power, the built environment and transportation; all of which are relevant in the context of sustainable cities.
When cities are sustainable and resilient in the face of complex challenges, capital deployed smartly and commercially will help to advance technology and solutions that are viable; encourage more agile regulations and policies; and make way for innovative business models, people and products.
Cities can, in turn, coordinate their policy settings, working with investors and businesses, to accelerate solutions by promoting innovations and encouraging test-beds to help the transition to a low-carbon future.
It is also important to be inclusive when doing urban planning, to harmonise cities and the community living in them together in a sustainable manner.
Not just in the context of the fact that we are dealing with longer lifespans and ageing populations, but also in respect to the vulnerable communities in our mix.
In return, corporates should be able to reap the benefits of more dynamic and resilient economies that will, over the long term, mitigate the risks of climate change, and help define and create new opportunities.
Together, we can work towards a net zero emissions world by 2050, by investing today with tomorrow in mind, for the next 30 years to come.
Thank you.
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Notes:
1 Climate at a glance, National Centers for Environmental Information. Accessed on 11 June 2021. https://www.ncdc.noaa.gov/cag/global/time-series
2 Why Singapore is heating up twice as fast as the rest of the world, Channel NewsAsia. Published on 30 Apr 2021. https://www.channelnewsasia.com/news/cnainsider/singapore-hot-weather-urban-heat-effect-temperature-humidity-11115384
3 2020 Tied for Warmest Year on Record, NASA Analysis Shows, NASA. Published on 14 Jan 2021. https://climate.nasa.gov/news/3061/2020-tied-for-warmest-year-on-record-nasa-analysis-shows/
4 Steel’s Contribution to a Low Carbon Future, worldsteel Association. Accessed on 2 June 2021. https://www.worldsteel.org/en/dam/jcr:c3acc5fd-e3c2-458c-a2cc-8c4880b9334c/Steel%2527s+contribution+to+a+low+carbon+future.pdf
5 How to make urban mobility clean and green, International Transport Forum. Published on 4 December 2018. https://www.itf-oecd.org/urban-mobility-clean-green
6 State and Trends of Carbon Pricing 2020, World Bank Group. Published on 27 May 2020. https://openknowledge.worldbank.org/handle/10986/33809
